I am pleased that the speculation is now over, and we all know what the latest changes will be. Here is an overview, from the 1st of October, 2015:
1. Property Investment lending for Auckland properties will be restricted to 70% lending.
2. Property Investment lending outside of Auckland will be restricted to 80% lending.
3. Home Owner lending in Auckland continues to have the restriction of 10% of a Bank's loan book (This means of the total bank loan portfolio, 10% can be above 80% lending)
4. Home Owner lending outside of Auckland will be lifted to a restriction of 15% of a Bank's loan book (This means of the total loan portfolio, 15% can be above 80% lending)
NOTE: it is important to understand that although the time frame set by The Reserve Bank is 1st October, it is likely that the banks will introduce these changes prior to that date.
For Property Investors: A Closer Look
Yes, in a few months you will be restricted to a 30% deposit in Auckland, BUT if you don't have this level of deposit you can still purchase, just in other parts of the country.
It is likely that any top ups on existing rental properties will also be restricted to 70% lending.
It may also be likely that you may not be able to top up on your home to 80% if the purpose of that top up is to purchase a rental property. But, this is still unknown. We are waiting for the bank criteria to be released.
More information will be provided as the Bank's release their updated criteria.